YaSheng (HERB) 10-K 30 Aug 16 2015 FY Annual report Financial data

Document and Entity Information

Document and Entity Information	12 Months Ended
	Dec. 31, 2015USD ($)shares
Document And Entity Information
Entity Registrant Name	Yasheng Group
Entity Central Index Key	1,123,312
Document Type	10-K
Document Period End Date	Dec. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float | $	$ 7,880,602
Entity Common Stock, Shares Outstanding | shares	157,165,783
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2,015

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 1,397,324	$ 11,907,242	$ 11,337,958
Accounts receivable, net	876,763	112,094,824	103,061,683
Inventories	1,251,007	341,756,253	318,980,143
Prepayments	2,829,709	4,070,937	4,400,112
Other receivables	111,875,965
Total current assets	118,230,768	469,829,256	437,779,896
Long-term investments		209,941	210,702
Property, plant and equipment, net	10,223,600	905,268,722	848,678,908
Construction in progress	29,205,254	6,960,289	7,083,472
Intangible assets, net	100,666,123	1,097,762,161	1,057,082,947
Total assets	258,325,745	2,480,030,368	2,350,835,926
Current liabilities:
Accounts payable	17,353	27,402,889	31,495,004
Accrued employee compensation and benefits	59,434
Short term loans		4,902,762	6,560,711
Other current liabilities	22,559	9,772,770	12,467,223
Long term debt	45,666,684	21,073,928	24,573,824
Total liabilities	45,766,030	58,249,587	68,536,050
Stockholders' equity:
Shares issued and outstanding	157,165,783	155,097,355	155,097,355
Accumulated other comprehensive income	(56,482,033)	445,988,809	443,442,989
Retained earnings	111,875,965	1,820,694,617	1,683,759,531
Total stockholders' equity	212,559,715	2,421,780,781	2,282,299,875
Total liabilities & stockholders' equity	$ 258,325,745	$ 2,480,030,368	$ 2,350,835,925

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Stockholders' equity:
Common stock par value	$ 1	$ 1	$ 1
Common stock shares authorized	800,000,000	800,000,000	800,000,000
Common stock shares issued		155,097,355	155,097,355
Common stock shares Outstanding		155,097,355	155,097,355

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Statement [Abstract]
Net sales	$ 938,896,315	$ 1,012,135,672	$ 1,011,323,630
Cost of goods sold	819,738,022	869,280,442	867,845,745
Gross profit	119,158,293	142,855,230	143,477,886
Operating expenses:
Sales and marketing	1,821,252	1,792,470	2,009,990
General and administrative	4,233,579	4,147,498	4,725,345
Total operating expenses	6,054,831	5,939,968	6,735,335
Operating profit	113,103,462	136,915,263	136,742,550
Interest expense	573,214	666,613	937,163
Other income (expense)	654,283	686,436	688,106
Income before income tax expense	111,875,965	136,935,085	136,493,493
Net income	$ 111,875,695	$ 136,935,085	$ 136,493,493

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income / Loss	Total
Beginning Balance, Amount at Dec. 31, 2011	$ 155,097,355	$ 1,547,266,038	$ 388,404,930	$ 2,090,768,323
Net income		136,494,493		136,494,493
Foreign currency translation			55,038,059	55,038,059
Ending Balance, Amount at Dec. 31, 2012	155,097,355	1,683,759,531	443,442,989	2,282,299,875
Net income	126,417,222	0	126,417,222	136,493,493
Foreign currency translation	0	5,287,780	5,287,780	55,038,059
Ending Balance, Amount at Dec. 31, 2013	155,097,355	1,547,266,038	388,404,930	2,282,299,875
Net income		136,494,493	0	136,935,085
Foreign currency translation		0	55,038,059	2,545,820
Ending Balance, Amount at Dec. 31, 2014	155,097,355	1,683,759,531	443,442,989	2,421,780,781
Net income		111,875,965		111,875,695
Foreign currency translation			(28,457,797)	(9,273,237)
Asset replacement loss		(1,877,176,650)	$ (417,531,012)	(2,294,707,662)
Equity change	2,068,428			2,068,428
Ending Balance, Amount at Dec. 31, 2015	$ 157,165,783	$ 55,393,932		$ 212,559,715

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Operating activities:
Net income	$ 111,875,695	$ 136,935,085	$ 136,493,493
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	14,369,671	12,939,730	13,069,959
Allowance for doubtful accounts	1,334,186	930,389	437,993
Changes in assets and liabilities:
Accounts receivable	(111,218,061)	(18,645,061)	(8,777,416)
Inventories	340,505,246	(60,257,469)	(84,654,827)
Prepaid and other current assets	1,241,228	(313,284)	(314,671)
Accounts payable	(27,385,536)	(3,969,142)	(5,024,141)
Tax payables	0	(84,632)	(64,903)
Accrued expenses and other current liabilities	(9,690,777)	(84,873)	(72,237)
Net cash provided by operating activities	321,031,922	68,077,311	51,093,250
Investing activities:
Purchase of assets	(324,337,031)	(61,920,730)	(43,779,419)
Net cash used in investing activities	(324,337,031)	(61,920,730)	(43,779,419)
Cash flows from financing activities:
Issuance of common stock	2,068,428
Payment on land lease		(3,411,143)	(4,420,607)
Increase (decrease) in debt		(2,489,142)	(3,932,423)
Net cash provided by financing activities	2,068,428	(5,900,285)	(8,353,030)
Effect of exchange rate change on cash and cash equivalents	(9,273,237)	312,988	1,396,772
Net increase (decrease) in cash and cash equivalents	(10,509,918)	569,284	357,574
Cash and cash equivalents at beginning of period	11,907,242	11,337,958	10,980,384
Cash and cash equivalents at end of period	1,397,324	11,907,242	11,337,958
Supplemental Disclosures:
Cash paid for interest	$ 758,803	$ 666,613	$ 937,163

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Consolidated Statements Of Comprehensive Income
Net income	$ 111,875,695	$ 136,935,085	$ 136,493,493
Other comprehensive income:
Foreign currency translation adjustment	(9,273,237)	2,545,820	55,038,059
Total other comprehensive income	(9,273,237)	2,545,820	55,038,059
Total comprehensive income	$ 102,602,458	$ 139,480,905	$ 191,531,552

1. Organization and nature of o

1. Organization and nature of operations	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
1. Organization and nature of operations	Yasheng Group (“The Company”) is a California corporation with primary operations in China. The Company designs, develops, manufactures and markets high-quality farming and sideline products; chemical materials and products; textiles; construction materials; and livestock and poultry. It also designs, develops and markets new technologies related to agriculture and genetic biology.

2. Summary of Significant Accou

2. Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
2. Summary of Significant Accounting Policies	(a) Accounting standards The consolidated financial statements have been prepared on a historical cost basis to reflect the financial position and results of operations of the Company in accordance with accounting principles generally accepted in the United States of America. (b) Fiscal year The Company’s fiscal year ends on the 31st of December of each calendar year. (c) Business combination The consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated. (d) Use of estimates The Company’s discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. (e) Revenue recognition We mainly sell food products. We recognize revenue when title and risk of loss are transferred to our customers. This generally happens upon delivery of our product. (f) Shipping and handling costs The Company records outward freight, purchasing and receiving costs in selling expenses; inspection costs and warehousing costs are recorded as general and administrative expenses. (g) Cash and cash equivalents Cash and cash equivalents include cash on hand, demand deposits held by banks, and securities with maturities of three months or less. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents are composed primarily of investments in money market accounts stated at cost, which approximates fair value. (h) Inventories Inventories are recorded using the weighted average method and are valued at the lower of cost or market. (i) Accounts receivable, net The carrying amount of accounts receivable is reduced by a valuation allowance that reflects the Company’s best estimate of the amounts that will not be collected. In addition to reviewing delinquent accounts receivable, the Company considers many factors in estimating its general allowance, including aging analysis, historical bad debt records, customer credit analysis and any specific known troubled accounts. (j) Property, plant and equipment Property, plant and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Amortization of leasehold improvements is calculated on a straight-line basis over the life of the asset or the term of the lease, whichever is shorter. Major renewals and betterments are capitalized and depreciated; maintenance and repairs that do not extend the life of the respective assets are charged to expense as incurred. Upon disposal of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in income. Depreciation related to property and equipment used in production is reported in cost of sales. Property and equipment are depreciated over their estimated useful lives as follows: Types of PPE Depreciation period Residual rate(%) Buildings and improvements 30 1 Machinery and equipment 5 3 Transportation 10 3 Office equipment and others 5 3 Long-term assets of the Company are reviewed annually to assess whether the carrying value has become impaired, according to the guidelines established in Statement of Accounting Standards (SFAS) No. 144, "Accounting for the Impairment of Disposal of Long-Lived Assets." The Company also evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. No impairment of assets was recorded in the periods reported. ( k Intangible assets Intangible assets consist of 30 years use right of Fruit vegetable franchise baseand are recorded at cost. The cost of fruit vegetable franchise base use right was amortized over 20 years using the straight-line method. (l) Impairment of long-lived assets The carrying amounts of long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of assets to future undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. (m) Investments Investments consist primarily of less than 20% equity positions in non-marketable securities and are recorded at lower of cost or market. (n) Foreign currency translation The accompanying financial statements are presented in United States (US) dollars. The functional currency is the Renminbi (RMB). The financial statements are translated into US dollars from RMB at year-end exchange rates for assets and liabilities, and weighted average exchange rates for revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. Gains and losses resulting from foreign currency translation are recorded in a separate component of shareholders’ equity. Foreign currency translation adjustments are included in accumulated other comprehensive income in the consolidated statements of shareholders’ equity for the years presented. RMB is not freely convertible into the currency of other nations. All such exchange transactions must take place through authorized institutions. There is no guarantee the RMB amounts could have been, or could be, converted into US dollars at rates used in translation. The spot exchange rate and averaged exchange rate are listed below: December, 31, 2015 Averaged exchange rate 6.4936 6.2284 (o) Income taxes According to China's national tax policy, Yasheng Group and its all agricultural branches will gain China’s national tax authority for tax exemption. (p) Earnings per share Basic earnings per share are computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share are computed using the weighted average number of common and, if dilutive, potential common shares outstanding during the year. The Company has no potentially dilutive shares for the periods shown. (q) Economic and Political Risks The Company faces a number of risks and challenges as a result of having primary operations and markets in the PRC. Changing political climates in the PRC could have a significant effect on the Company's business. (r) Comprehensive income Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Accumulated other comprehensive income, as presented on the accompanying consolidated balance sheets, consists of mainly the cumulative foreign currency translation adjustment. The number -56,482,033 of other comprehensive income is due to the foreign currency translation. (s) Value added tax (VAT) According to China's national tax policy, Yasheng Group and its all agricultural branches will gain China’s national tax authority for tax exemption. (t) Recently Issued Accounting Standards Recently Adopted Accounting Pronouncements In September 2011, the Financial Accounting Standards Board (“FASB”) issued guidance on testing goodwill for impairment. The new guidance provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of areporting unit is less than its carrying amount. If an entity determines that this is the case, it is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized for that reporting unit (if any). If an entity determines that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. We adopted this new guidance. In December 2011, the Financial Accounting Standards Board (“FASB”) issued guidance enhancing disclosure requirements about the nature of an entity’s right to offset and related arrangements associated with its financial instruments. The new guidance requires the disclosure of thegross amounts subject to rights of set-off, amounts offset in accordance with the accounting standards followed, and the related net exposure. In January 2013, the FASB clarified that the scope of this guidance applies to derivatives, repurchase agreements, and securities lendingarrangements that are either offset or subject to an enforceable master netting arrangement, or similar agreements. We have adopted this new guidance. In February 2013, the FASB issued guidance on disclosure requirements for items reclassified out of accumulated other comprehensive income (“AOCI”). This new guidance requires entities to present (either on the face of the income statement or in the notes to financial statements) theeffects on the line items of the income statement for amounts reclassified out of AOCI. We have adopted this new guidance. In September 2011, the Financial Accounting Standards Board (“FASB”) issued guidance on testing goodwill for impairment. The new guidance provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of areporting unit is less than its carrying amount. If an entity determines that this is the case, it is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized for that reporting unit (if any). If an entity determines that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. We adopted this new guidance. Recent Accounting Pronouncements Not Yet Adopted In March 2013, the FASB issued guidance on a parent’s accounting for the cumulative translation adjustment upon de-recognition of a subsidiary or group of assets within a foreign entity. This new guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The new guidance will be effective for us beginning December 31, 2014.We do not anticipate material impacts on our financial statements upon adoption. In February 2013, the FASB issued guidance on disclosure requirements for items reclassified out of accumulated other comprehensive income (“AOCI”). This new guidance requires entities to present (either on the face of the income statement or in the notes to financial statements) theeffects on the line items of the income statement for amounts reclassified out of AOCI. We have adopted this new guidance. (u) Fair Value of Financial Instruments The carrying amounts of accounts receivable, accounts payable, other liabilities, and short-term borrowings approximate their fair value due to the short-term maturity of these instruments. Long term debt approximates fair value as its interest rates approximates market interest rates .

3. Accounts receivable

3. Accounts receivable	12 Months Ended
	Dec. 31, 2015
Receivables [Abstract]
3. Accounts receivable	Accounts receivable are recognized and carried at original invoice amount outstanding less an allowance for doubtful accounts. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balances. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence.

4. Inventories

4. Inventories	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
4. Inventories	The major classes of inventory: raw materials, packaging materials, products in process, finished goods, stocks, low-value consumable goods, materials in transit as well as others.

5. Property, plant and equipmen

5. Property, plant and equipment & depreciation	12 Months Ended
	Dec. 31, 2015
Property, Plant and Equipment [Abstract]
5. Property, plant and equipment & depreciation	The major classes of property, plant and equipment include building and improvements, machinery and equipment, transportation facilities, agricultural facilities, etc. They are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets.

6. China contribution plan

6. China contribution plan	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
6. China contribution plan	The Company’s subsidiaries in China participate in a government-mandated multi-employer defined contribution plan pursuant to which certain retirement, medical and other welfare benefits are provided to employees. Chinese labor regulations require the Company’s subsidiaries to pay to the local labor bureau a monthly contribution at a stated contribution rate based on the monthly basic compensation of qualified employees. The relevant local labor bureau is responsible for meeting all retirement benefit obligations; the Company has no further commitments beyond its monthly contribution.

7. Profit appropriation

7. Profit appropriation	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
7. Profit appropriation	Pursuant to the laws applicable to China’s Foreign Investment Enterprises, each of the Company’s subsidiaries in China must make appropriations from its after-tax profit to non-distributable reserve funds as determined by the Board of Directors. These reserve funds include a (i) general reserve, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. The general reserve fund requires annual appropriations of 10% of after-tax profit (as determined under PRC GAAP) until these reserves equal 50% of the amount of paid-in capital; the other fund appropriations are at the Company’s discretion. The undistributed profit is 111,875,965$, and transferred to Gansu Yasheng Agro-Industrial and Commerce Group Co. Ltd with replaced asset.

8. Concentration of risks

8. Concentration of risks	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
8. Concentration of risks	The operations of the Company are substantially located in the PRC and accordingly, investing in the shares of the Company is subject to among others, the PRC’s political, economic and legal risks.

9. Income taxes

9. Income taxes	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
9. Income taxes	The Company and all of its agricultural subsidiaries are exempt from income taxes in the PRC.

10. Debt

10. Debt	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
10. Debt	The Company obtains secured lending from the banks using the following two types of arrangements, collateral and guarantee. Collateral is loans secured against the assets of the Yasheng Group, while guarantee is loans provided with the guarantee from a third party. (a) Long term debt The long-term debt, amounting to 45,666,684 $, of our company is mainly generated by the asset value of fruit vegetable franchise and that surpassed the replacement asset value (because of the insufficiency of replacement assets, the gap should be filled by an amount of debt,). (b) Current portion of long term debt This portion amounts to 45,666,684 $.

11. Employee benefit plans

11. Employee benefit plans	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
11. Employee benefit plans	The Company provides the following benefits for all employees: A. Employee Welfare Fund: An amount equal to 14% of payroll is set aside by the Company for standard employee benefits. This fund is managed and controlled by the Company. All required payments current. B. Open Policy Pension: The Company pays to national and community insurance agents an amount equal to 20% of payroll. This insurance continues to cover the employee subsequent to retirement. C. Unemployment Insurance: The Company pays to the national employment administrative entities an amount equal to 1% of payroll. Any dismissed employee thereby receives a specified amount of family-support funds for a designated period. D. Housing Surplus Reserve: The Company pays to the national housing fund administrative entities an amount equal to 10% of payroll for deposit into the employees' future housing allowance accounts. The aforesaid items are for employee's benefits and should be accounted for as the Company's expenses.

12. Stockholders' Equity

12. Stockholders' Equity	12 Months Ended
	Dec. 31, 2015
Equity [Abstract]
12. Stockholders' Equity	The Company issued 2,068,428 new shares in 2015.

13. Important Considerations

13. Important Considerations	12 Months Ended
	Dec. 31, 2015
Important Considerations
13. Important Considerations	On December 29, 2015 the Company completed a major asset replacement, replacing out assets and business of all its subsidiaries located in Gansu, and replacing in the management and business of fruit and vegetable base in China's Zhejiang. The assets and liabilities reflected in this report are the input assests and liabilities as of December 31, 2015. The profit and loss in the income statement are generated by the output assets from January 1, 2015 to December 29, 2015. The profit and loss generated from the input and output from December 29, 2015 to December 31, 2015 are neglected.

14. Historical Cost

14. Historical Cost	12 Months Ended
	Dec. 31, 2015
Historical Cost
14. Historical Cost	Since the swap was effected between related Companies, we recognized a one-time charge to earnings due to the need to value the Swap-in assets at historical cost as compared to appraised valuation which was the valuation used by us before the Swap.

2. Summary of Significant Acc22

2. Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Accounting standards	The consolidated financial statements have been prepared on a historical cost basis to reflect the financial position and results of operations of the Company in accordance with accounting principles generally accepted in the United States of America.
Fiscal year	The Company’s fiscal year ends on the 31st of December of each calendar year.
Business combination	The consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated.
Use of estimates	The Company’s discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Revenue recognition	We mainly sell food products. We recognize revenue when title and risk of loss are transferred to our customers. This generally happens upon delivery of our product.
Shipping and handling costs	The Company records outward freight, purchasing and receiving costs in selling expenses; inspection costs and warehousing costs are recorded as general and administrative expenses.
Cash and cash equivalents	Cash and cash equivalents include cash on hand, demand deposits held by banks, and securities with maturities of three months or less. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents are composed primarily of investments in money market accounts stated at cost, which approximates fair value.
Accounts receivable, net	The carrying amount of accounts receivable is reduced by a valuation allowance that reflects the Company’s best estimate of the amounts that will not be collected. In addition to reviewing delinquent accounts receivable, the Company considers many factors in estimating its general allowance, including aging analysis, historical bad debt records, customer credit analysis and any specific known troubled accounts.
Property, plant and equipment	Property, plant and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Amortization of leasehold improvements is calculated on a straight-line basis over the life of the asset or the term of the lease, whichever is shorter. Major renewals and betterments are capitalized and depreciated; maintenance and repairs that do not extend the life of the respective assets are charged to expense as incurred. Upon disposal of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in income. Depreciation related to property and equipment used in production is reported in cost of sales. Property and equipment are depreciated over their estimated useful lives as follows: Types of PPE Depreciation period Residual rate(%) Buildings and improvements 30 1 Machinery and equipment 5 3 Transportation 10 3 Office equipment and others 5 3 Long-term assets of the Company are reviewed annually to assess whether the carrying value has become impaired, according to the guidelines established in Statement of Accounting Standards (SFAS) No. 144, "Accounting for the Impairment of Disposal of Long-Lived Assets." The Company also evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. No impairment of assets was recorded in the periods reported.
Intangible assets	Intangible assets consist of 30 years use right of Fruit vegetable franchise baseand are recorded at cost. The cost of fruit vegetable franchise base use right was amortized over 20 years using the straight-line method.
Impairment of long-lived assets	The carrying amounts of long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of assets to future undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell.
Investments	Investments consist primarily of less than 20% equity positions in non-marketable securities and are recorded at lower of cost or market.
Foreign currency translation	The accompanying financial statements are presented in United States (US) dollars. The functional currency is the Renminbi (RMB). The financial statements are translated into US dollars from RMB at year-end exchange rates for assets and liabilities, and weighted average exchange rates for revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. Gains and losses resulting from foreign currency translation are recorded in a separate component of shareholders’ equity. Foreign currency translation adjustments are included in accumulated other comprehensive income in the consolidated statements of shareholders’ equity for the years presented. RMB is not freely convertible into the currency of other nations. All such exchange transactions must take place through authorized institutions. There is no guarantee the RMB amounts could have been, or could be, converted into US dollars at rates used in translation. The spot exchange rate and averaged exchange rate are listed below: December, 31, 2015 Averaged exchange rate 6.4936 6.2284
Income taxes	According to China's national tax policy, Yasheng Group and its all agricultural branches will gain China’s national tax authority for tax exemption.
Earnings per share	Basic earnings per share are computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share are computed using the weighted average number of common and, if dilutive, potential common shares outstanding during the year. The Company has no potentially dilutive shares for the periods shown.
Economic and Political Risks	The Company faces a number of risks and challenges as a result of having primary operations and markets in the PRC. Changing political climates in the PRC could have a significant effect on the Company's business.
Comprehensive income	Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Accumulated other comprehensive income, as presented on the accompanying consolidated balance sheets, consists of mainly the cumulative foreign currency translation adjustment. The number -56,482,033 of other comprehensive income is due to the foreign currency translation.
Value added tax (VAT)	According to China's national tax policy, Yasheng Group and its all agricultural branches will gain China’s national tax authority for tax exemption.
Recently Issued Accounting Standards	Recently Adopted Accounting Pronouncements In September 2011, the Financial Accounting Standards Board (“FASB”) issued guidance on testing goodwill for impairment. The new guidance provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of areporting unit is less than its carrying amount. If an entity determines that this is the case, it is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized for that reporting unit (if any). If an entity determines that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. We adopted this new guidance. In December 2011, the Financial Accounting Standards Board (“FASB”) issued guidance enhancing disclosure requirements about the nature of an entity’s right to offset and related arrangements associated with its financial instruments. The new guidance requires the disclosure of thegross amounts subject to rights of set-off, amounts offset in accordance with the accounting standards followed, and the related net exposure. In January 2013, the FASB clarified that the scope of this guidance applies to derivatives, repurchase agreements, and securities lendingarrangements that are either offset or subject to an enforceable master netting arrangement, or similar agreements. We have adopted this new guidance. In February 2013, the FASB issued guidance on disclosure requirements for items reclassified out of accumulated other comprehensive income (“AOCI”). This new guidance requires entities to present (either on the face of the income statement or in the notes to financial statements) theeffects on the line items of the income statement for amounts reclassified out of AOCI. We have adopted this new guidance. In September 2011, the Financial Accounting Standards Board (“FASB”) issued guidance on testing goodwill for impairment. The new guidance provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of areporting unit is less than its carrying amount. If an entity determines that this is the case, it is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized for that reporting unit (if any). If an entity determines that the fair value of a reporting unit is greater than its carrying amount, the two-step goodwill impairment test is not required. We adopted this new guidance. Recent Accounting Pronouncements Not Yet Adopted In March 2013, the FASB issued guidance on a parent’s accounting for the cumulative translation adjustment upon de-recognition of a subsidiary or group of assets within a foreign entity. This new guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The new guidance will be effective for us beginning December 31, 2014.We do not anticipate material impacts on our financial statements upon adoption. In February 2013, the FASB issued guidance on disclosure requirements for items reclassified out of accumulated other comprehensive income (“AOCI”). This new guidance requires entities to present (either on the face of the income statement or in the notes to financial statements) theeffects on the line items of the income statement for amounts reclassified out of AOCI. We have adopted this new guidance.
Fair Value of Financial Instruments	The carrying amounts of accounts receivable, accounts payable, other liabilities, and short-term borrowings approximate their fair value due to the short-term maturity of these instruments. Long term debt approximates fair value as its interest rates approximates market interest rates .

2. Summary of Significant Acc23

2. Summary of Significant Accounting Policies (Tables)	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Estimated useful lives as follows	Types of PPE Depreciation period Residual rate(%) Buildings and improvements 30 1 Machinery and equipment 5 3 Transportation 10 3 Office equipment and others 5 3
Exchange rate	December, 31, 2015 Averaged exchange rate 6.4936 6.2284

2. Summary of Significant Acc24

2. Summary of Significant Accounting Policies (Details)	12 Months Ended
	Dec. 31, 2015
BuildingAndBuildingImprovements [Member]
Property, Plant and Equipment [Line Items]
Estimated useful live	30
Residual Rate	1.00%
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful live	5
Residual Rate	3.00%
Transportation Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful live	10
Residual Rate	3.00%
OfficeEquipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful live	5
Residual Rate	3.00%

2. Summary of Significant Acc25

2. Summary of Significant Accounting Policies (Details 1)	12 Months Ended
	Dec. 31, 2015$ / shares
Summary Of Significant Accounting Policies Details 1
Spot Exchange Rate	$ 6
Averaged exchange rate	$ 6